CHA News Article

Amendments Submitted on SB 335 — $5.2 Billion Hospital Fee Bill

The CHA Board Executive Committee met Aug. 8 and approved a final outstanding issue on the 30-month hospital fee program, which the CHA Board approved July 15 (see July 22 CHA News). The program covers July 1, 2011, through Dec. 31, 2013, and is similar in fee and payment structures to the prior two fee programs.

The hospital fee program, developed by the CHA Hospital Fee Workgroup, maximizes Medi-Cal payments to private hospitals for inpatient and outpatient services. In addition, the program includes a proposal for Medi-Cal managed care health plans to make supplemental payments to hospitals. The program also includes direct payments to designated and nondesignated public hospitals. A new component of the fee proposal establishes a mechanism to make increased payments to private and nondesignated public hospitals for out-of-network emergency care provided to Low-Income Health Program patients.

SB 335 (Hernandez, D-Baldwin Park/Steinberg, D-Sacramento) is being amended to reflect the current proposal, and will be heard on the Senate floor prior to moving to the Assembly. The bill requires a two-thirds vote of the Legislature and must be passed prior to adjournment of this legislative session Sept. 9. Once enacted, the bill requires the Department of Health Care Services (DHCS) to seek federal approval from the Centers for Medicare & Medicaid Services.

Hospitals will be provided with facility-specific modeling results that reflect the proposal included in SB 335. As with the prior hospital fee programs, the modeling is not final until CMS approves the entire package that will be submitted by DHCS. The approval could take several months.

The new hospital fee program is expected to provide hospitals with an overall net benefit of $5.2 billion over 30 months once fully implemented. The fee program is a top priority for CHA, which will continue to work closely with the Legislature, Administration and DHCS. Contact: Anne McLeod, (916) 552-7536,; Matt Absher, (916) 552-7669,